Term
| what is the foundation o the budget process |
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Definition
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Term
| mission statemnt is under what part of the budget process |
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Definition
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Term
| what answers the quesiton- what business are we in? |
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Definition
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Term
| steps of the budget process |
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Definition
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Term
| what is an endpoint to help fulfill its mission |
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Definition
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Term
| what is the statment of specific tasks to help accomplish goals |
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Definition
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Term
type of budget
-projects future sales |
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Definition
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Term
type of budget
-lists primary activities to achieve its goals and allocate dollar amount to it |
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Definition
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Term
| how do you calc. operating/profit budegt |
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Definition
| combine revenue and expense budegts to determine unit profit |
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Term
| which type of budegt is used for investments |
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Definition
| capital expenditure budget |
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Term
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Definition
| assumes fixed level of sales |
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Term
| what are the 2 approaches to budegting |
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Definition
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Term
| this allocates funds to departments according to previous period |
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Definition
incremental budegt
zero based budget |
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Term
| 2 characterisitics of incremental budegting |
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Definition
1) funds are given to departments, then maangers can use it to fund acitvities
2)DEvlops out of the previous budegt |
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Term
| priblems with incrmeental budgeting |
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Definition
difficlut to differntiate acitivties
inefficiencies growc they get hiddne b |
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Term
| zerro based budegts involves managers do what |
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Definition
| justify budget regardless of previous apportion |
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Term
| what is a decision package |
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Definition
| identifies and describes acitvity |
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Term
| problems wiht zero based budgeting-2 |
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Definition
more time/paperwork
activites managers want funded tedn to have benefits inflated |
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Term
| what is the outcome difference btwn incremental and zero base budegts |
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Definition
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Term
budegting cycle normally coincides with?
this means its how long |
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Definition
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Term
| what is an estimate of demand |
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Definition
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Term
| forecasting tehcniques hvae 2 cateogries- |
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Definition
use old info
employ expert judegemnt |
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Term
| Forcasting fro exisitn business usually use |
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Definition
| tends over the past years |
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Term
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Definition
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Term
| forcasting for new business uses |
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Definition
| forcasting market potential from expert judegemtn |
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Term
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Definition
| total demand in market for the good provided by new business |
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Term
| what are the costs eval in an expense budegt |
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Definition
| fixed, variable, discretionary |
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Term
operating budegt in a small org. invovles who?
what does thi person do |
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Definition
manager/owner
make strategies for net income and so forecast revenue and the expenses required to generate them |
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Term
| what makes the operating budegt harder in large organizations |
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Definition
| more employees and organizational units |
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Term
what is top down budegting
who uses it alot? |
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Definition
budegt amounts are imposed on middle and low level managers;
traditonal orgs. |
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Term
| what are 2 problems with top-dwon budegting |
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Definition
lower level not committed
lower level resent not being involved in budget process |
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Term
| what is the problem with bottom-up budegeting |
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Definition
| the managers future expednitures dont comply with ecnomic porjections of industry |
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Term
| for budegts do you revise during the year? |
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Definition
| yes- reflects operation changes |
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Term
| a con of revising the budget is that its normally a standard for measuring _, and if revised employees will say extneral conditions were the cause instead |
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Definition
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Term
| using the operating budegt allows for |
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Definition
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Term
| Performance Reports conisist of - |
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Definition
- real reveneue and expenses
budegted revnue and expenses
-last column= the difference |
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Term
| if the actual revenue/cost is greater than the budgeted- is this negative or positive |
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Definition
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Term
| what determines if a variacne in an operating budget is favorable |
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Definition
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Term
| what are 2 causes of favorable variance |
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Definition
postiive revenue
negative expense |
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